Property management should be a priority for public sector

In the past there has been a growing realisation that the public sector is sitting on, or in, property that could provide many of the answers to the government's current problems, both financial and in terms of the quality of public sector service delivery. There is the potential to sell assets, both to raise cash and reduce future liabilities, and re-jigging property can aid the process of streamlining frontline services. The prime minister raised the bar for local authorities last October when he stated that £16bn could be raised from asset disposals with £11bn of that provided by local government. Whether the savage public sector expenditure cuts envisioned by both sides of the political divide come sooner or later, the efficient use of property assets will be an imperative for public service providers in a much more significant and transparent way than ever before. So says one of the major firms of property consultants, GVA Grimley. Local authorities are going to be in the firing line and the firm believes that one consequence will be a 50% reduction in the amount of property occupied by local authority departments. "Property needs to be at the centre of debate about service change and financial efficiencies," the firm says in what it describes as a "thought leadership research bulletin" called Cutting Costs Not Corners. Obstacles One of the main obstacles to achieving government spending reduction objectives is likely to be timing, however. "Given the relatively illiquid nature of property, ambitious strategies need to be put in place now if the unprecedented reform agenda for public sector property is to be met," says the report. Property is one of the areas where demand can be reined in and savings can be achieved through increased use of outsourced services. But a switch to more flexible ways of working for those activities retained by local authorities will also reduce demand for space while having the potential to increase productivity. So we can expect to see more council employees working from home and sharing desks when they are in the office. However, to realise the full benefits of changing working practices will mean not just a reduction in the amount of space but also a change in the type of space that is required. There will need to be more "touch down" facilities and meeting spaces as well as "highly IT friendly" environments. GVA Grimley also says that an "invest to save" model will be needed to create this new type of space. The report acknowledges that the agenda for public sector property asset management is huge. And it points to further complexities. The fall in property values over the last two years means that the goldmine that local authorities may once have been sitting on is now worth considerably less. However, the other side of that coin is that public sector bodies may find it easier to sell the property that they occupy and simultaneously lease it back from the new owner.